This is what is happening to the S&P 500 and the market this week

The S&P500 hits new records

UBS Global Wealth Management’s head of equities for the Americas, David Lefkowitz, raised his targets for the S&P 500, projecting the index to reach 4,500 by December 2021 and 4,650 by June 2022. UBS had previously predicted that the index would reach 4,400 and 4,500 at those intervals.

“Our second-quarter earnings estimates for the S&P 500 indicate that earnings will outperform consensus estimates by 15%. Earnings are expected to fall by 8% in the second quarter compared to the first. “This makes no sense to us,” the note stated.

According to the  Market Strategist Survey, the S&P 500 was trading around 4,388 at midday Tuesday, 2.5 percent below the December UBS target but above the average year-end target among major strategists.

Several high-profile earnings beats have already occurred during the second-quarter earnings season, including PepsiCo, JPMorgan, and Goldman Sachs on Tuesday.

Despite these reports, the banks’ stocks fell during the trading session on Tuesday. According to UBS, investors should not be concerned about the short-term reaction to quarterly results, but rather trust that rising profits will keep the bull market going.

“Large earnings beats have not always been rewarded by the market in the last couple of earnings seasons. This earnings season, we can’t rule out a similar experience. “However, we caution investors not to lose sight of the big picture,” the note said.

Boeing stock

Boeing fell about 3% on Tuesday, making it the worst performer in the Dow Jones Industrial Average of 30 stocks.

Wall Street reacted to news that Boeing has lowered its delivery target for its 787 Dreamliner planes and will temporarily reduce production rates for the wide-body jets due to the discovery of a new defect. It is yet another setback for the 787 Dreamliner and the company as a whole.

“I’m sick about what’s going on — sick,” Cramer admitted on “Squawk on the Street.” “Everyone should be; Boeing is a national treasure.”

“They are extremely fortunate that it is only Airbus,” Cramer added, referring to Boeing’s European rival. The two companies are the world’s leading manufacturers of passenger planes. “I mean, if this was Morgan Stanley vs. Goldman Sachs vs. JPMorgan, they’d be losing market share left and right. But it’s more Pepsi versus Coke, and people still drink soda in the end.”

Boeing is owned by Cramer’s charitable trust.

On numerous occasions, the “Mad Money” host has mentioned the company as a solid way for investors to play the reopening of the US economy following pandemic-related disruptions.

He maintained his investment thesis on Tuesday, despite saying he “cannot believe, frankly, the never-ending stream of bad news.”

“Aside from the fact that I’m a jerk, why do I continue to use my Boeing for my charitable trust? Because I genuinely believe that when travel resumes,” Boeing will be a big winner, according to Cramer.

At the same time, Cramer admitted that Boeing has “one of the worst sets of facts” he’s ever dealt with. In addition to the business slowdown caused by the pandemic, Boeing has faced a number of technical challenges, including two fatal 737 Max crashes that killed 346 people and resulted in a 20-month grounding of Max planes.

The 737 Max was cleared to fly passengers again by the Federal Aviation Administration in November.

However, more than 100 of those planes were temporarily taken out of service in April to address a manufacturing issue with their electrical power system. The FAA approved the electrical fix in May, allowing Boeing to resume 737 Max deliveries and airlines to begin the process of repairing the planes and returning them to the skies.

Boeing has halted deliveries of the 787 Dreamliner twice in the last year, the most recent time in May. The first pause, caused by production issues, began last year and ended in late March.

Boeing shares were up around 8% year to date and more than 31% in the previous 12 months as of late morning trading Tuesday. In comparison, the Dow has gained 14 percent year to date and nearly 34 percent since mid-July 2020.

Chinese stocks 

“The incentives to become incredibly successful in China are diminishing slightly now that the government is expressing concern,” Wood said on Tuesday during an Ark Invest webinar. “Some people believe they have more power than the government believes they do. So I believe there is a valuation reset.”

China has begun to crack down on its titans and has pledged to update rules for companies listed on US exchanges. Earlier this month, the Chinese government fined Tencent, Alibaba, and the newly public Didi for anti-monopoly behavior. Didi, a newly public ride-hailing app, tanked after China announced that new users in the country would be unable to download the app while the company undergoes a cybersecurity review.

During the crackdown, Wood sold 340,453 Tencent shares last week and 352,991 shares on Monday. Furthermore, Wood sold 341,190 shares of JD.com last week, followed by another 66,600 shares on Monday. JD.com, Baidu, Tencent, and Alibaba continue to be among the top holdings in the ARK Autonomous Technology & Robotics ETF.

“In terms of these very large mega-cap companies scaling to other parts of the world, I have a feeling there are some national security considerations that could either slow or stop them,” Wood said. “I would say that from a valuation standpoint, these stocks have come down and will most likely continue to fall.”

Wood, who is said to support the Trump administration’s foreign policy toward China, emphasized the importance of “sustaining the policies of the previous administration,” she said.